Bitcoin (BTC) led a broader recovery in the crypto market on Friday, appearing to have found a bottom after its latest crash.
BTC is trading up 14.3%, retaking the $30,000 mark after tumbling to as low as $26,000 on Thursday. The token has been on a downturn ever since the U.S. Federal Reserve hiked interest rates earlier in May.
But this is precisely why any short-term recovery in BTC should be taken with a grain of salt. High market volatility could make BTC and its peers prone to large swings in either direction, with a capitulation to likely follow.
Crypto market sentiment is still languishing at “extreme fear,” data shows.
Factors behind BTC crash are still in play
BTC’s latest tumble was driven by two main factors- fears of rising inflation, and interest rate hikes by the Fed. Both these factors are still in play for the market.
